WORD PROBLEMS
Choose 5 from the following problems then solve. Show your solution. Use the correct
formula. Follow the given example.
Example:
Leo saves 30% of his monthly salary. If his monthly salary is
P18,000, how much is his savings in a month?
Solution: Rate – 30%
Base – P18,000
P= B x R
= P18,000 x 0.3
= P 5,400
1. The price of a cellular phone decreased from p15 000 to P9 000. Find the
percent of decrease.
2. Mr. Santos wants to sell the lot he inherited for P1 million pesos. How much
commission would a sales agent or real estate broker get if he is entitled to a 5%
commission? How much is the net price of the lot?
3. Dominique bought a pair of shoes originally priced at P2 500. The pair of shoes
was on sale at 5% discount. How much is the sale price of the shoes?
4. Roy bought a wallet at the sale price of P560. Its original price was P700. Find
the rate of discount.
5. Manuel, a sales agent, has a basic salary of P18,000 and a commission of 20%
on all sales above P80, 000. If his total sales is P290 000. How much is his total
income?
6. Patty made a P50 000 loan to finance her catering business. If she borrowed at
9% simple interest. How much interest will she pay after 9 months?
7. A sales tax for an item is P420 or 6%. How much is the selling price and the total
cost of the item?
8. If an interest of P3 000 is paid for the principal P25 000 after a year. What is the
rate of simple interest? How much will be the interest after two years?
9. Coach Bryan borrowed money from his friend at 8% simple interest. If he paid
an interest of P480 after 18 months, how much money did he borrow?
10. Mary left P900 to Anne. When Mary asked for it after six months, Anne decided
to give P945 instead because she was able to use the money. What interest rate
on Monica’s money was used by Anne?
11. A refrigerator is marked P15 100. A tax of 4% is added. How much is the sales
tax? What is the total cost of the refrigerator?
12. Rolando has P20 000 in his savings account. If the rate of interest is 4.5% a
year, how much interest does his money earn? How much money will he have in
all?
13. Compute for the discount and the sale price of a blouse 25% less than the
regular price of P800.
14. Rey, a sales agent has a basic salary of P19 000 a month. He gets a
commission of 20% on all sales above P150 000. How much his total income if
his sales amount to P275 000?
15. Mr. Santos bought a colored TV for P28 000, a washing machine For P15 850
and an electric fan for P5 575. If he was given 15% discount on all items, how
much did he save? How much did he pay?
Answers
Answer:
have to work with money every day. While balancing your checkbook or calculating your monthly expenditures on espresso requires only arithmetic, when we start saving, planning for retirement, or need a loan, we need more mathematics.
Simple Interest
Discussing interest starts with the principal, or amount your account starts with. This could be a starting investment, or the starting amount of a loan. Interest, in its most simple form, is calculated as a percent of the principal. For example, if you borrowed $100 from a friend and agree to repay it with 5% interest, then the amount of interest you would pay would just be 5% of 100: $100(0.05) = $5. The total amount you would repay would be $105, the original principal plus the interest.
four rolled-up dollar bills seeming to grow out of dirt, with a miniature rake lying in between them
SIMPLE ONE-TIME INTEREST
I
=
P
0
r
A
=
P
0
+
I
=
P
0
+
P
0
r
=
P
0
(
1
+
r
)
I is the interest
A is the end amount: principal plus interest
P
0
is the principal (starting amount)
r is the interest rate (in decimal form. Example: 5% = 0.05)
EXAMPLES
A friend asks to borrow $300 and agrees to repay it in 30 days with 3% interest. How much interest will you earn?
Show Solution
The following video works through this example in detail.
One-time simple interest is only common for extremely short-term loans. For longer term loans, it is common for interest to be paid on a daily, monthly, quarterly, or annual basis. In that case, interest would be earned regularly.
For example, bonds are essentially a loan made to the bond issuer (a company or government) by you, the bond holder. In return for the loan, the issuer agrees to pay interest, often annually. Bonds have a maturity date, at which time the issuer pays back the original bond value.
EXERCISES
Suppose your city is building a new park, and issues bonds to raise the money to build it. You obtain a $1,000 bond that pays 5% interest annually that matures in 5 years. How much interest will you earn?
Show Solution
Further explanation about solving this example can be seen here.
We can generalize this idea of simple interest over time.
SIMPLE INTEREST OVER TIME
I
=
P
0
r
t
A
=
P
0
+
I
=
P
0
+
P
0
r
t
=
P
0
(
1
+
r
t
)
I is the interest
A is the end amount: principal plus interest
P
0
is the principal (starting amount)
r is the interest rate in decimal form
t is time
The units of measurement (years, months, etc.) for the time should match the time period for the interest rate.
APR – ANNUAL PERCENTAGE RATE
Interest rates are usually given as an annual percentage rate (APR) – the total interest that will be paid in the year. If the interest is paid in smaller time increments, the APR will be divided up.
For example, a 6% APR paid monthly would be divided into twelve 0.5% payments.
6
÷
12
=
0.5
A 4% annual rate paid quarterly would be divided into four 1% payments.
4
÷
4
=
1
EXAMPLE
Treasury Notes (T-notes) are bonds issued by the federal government to cover its expenses. Suppose you obtain a $1,000 T-note with a 4% annual rate, paid semi-annually, with a maturity in 4 years. How much interest will you earn?
Show Solution
This video explains the solution.
TRY IT
Step-by-step explanation:
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